This must be my profit, it says so on my phone!

Proof of Profit

If you take care of the “proof of profit” cycle then you will consistently make the profits you should.

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Profit Margins: Make more money with every sale

Increasing your profit margins results in higher profits and improved cashflow. It’s so beneficial and simple to put in to practice – start making your changes today

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A gory cashflow model is a useful cashflow model – the bloodier the better

You probably can’t rely on your bank to save the day so it’s down to you

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I can have the business I want – by stopping the business I’ve got

Some time ago I posted a blog entitled “I can’t have the business I want…..because of the business I’ve got!” which concerned an owner-manager who had become trapped in his company by time-consuming, low-profit clients he didn’t really want but couldn’t afford to lose.

Recently, I was talking to another owner-manager who solved the problem by simply changing her business.

She started up some years ago providing the same services to her own clients that she had provided in corporate life and that got her new company off to a good start. However, she had become disillusioned with what she was doing and didn’t want to continue with it.

And this is one of the beauties of running your own business – you can make it do what you want it to.

And when you change direction you have one massive advantage – you already know how to start up and run a business!

Having made some profits and built up some cash in the bank, she stopped marketing her existing services and re-trained in a different activity. She’s now about to launch her new services into a new market and is very confident that she’ll succeed and also be a lot happier with what she’s doing.

What she had before was hardly an Ugly Duckling but she emerges from it as a beautiful swan gliding towards success and fulfilment 😉

So, good luck to her and it’s a lesson to all of us who run our own businesses – use the freedom you have to run the business you want.

 

Michael

@diaryofanomb

 

What value does an FD add – and why you don’t need one

This gives your business the best of both worlds – the senior financial input you need but without a full-time cost. It’s a solution that an FD would be proud of!

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From paper bag to paper-free – alchemy for accountants

It’s the old accounting nightmare – the client brings in their records in a carrier bag or shoe box, dumps it on the desk and says “Here you go –  can you get my accounts / tax return done by the end of the month, please?”

We don’t see it happen very often but it happened recently with a new client.

One carrier bag containing a lever-arch file of purchase invoices and a box file full of bank statements and cash receipts. The previous accountant is no longer in business but there are accounts from two years ago we can take as our starting point.

Looks like a job for cloud accounting, QuickBooks and AutoEntry.

AutoEntry

The first task – to scan the 35 pages of bank statements for the financial year and upload them as PDFs to AutoEntry.

The next day AutoEntry had crunched the bank statement data into one file which we downloaded as a QuickBooks compatible CSV file and 950 receipts and payments were ready to be imported into QuickBooks.

We have since done the same with credit card statements.

 

QuickBooks (QBO)

Having imported the bank and credit card receipts and payments into QBO we can start to account for them. There are two labour-saving tools at this stage:

  1. Set rules so that when a particular customer or supplier name or reference appears on the bank statement the correct accounting entry is automatically made for that transaction
  2. Even without rules, QBO will start to remember transactions and suggest the accounting entries for recurring customers and suppliers

Very quickly the bank and credit card transactions are dealt with and the accounts are beginning to take shape. There’s more to be done but the bulk of the routine transaction work is complete.

 

Future workflow

We can’t just look backwards as there is little point in doing the historical accounting without keeping the books up to date going forwards.

We set up the client to use AutoEntry so they can upload sales and purchase invoices every day and set up a daily import of the bank transactions directly from the bank into QBO. The day-to-day workflow is now under control.

Everything is kept up to date and visible so the client can get back to running their business and keep an eye on the financial performance, cashflow, margins, debtors etc. at the same time.

 

This blog is mainly for people running their own business. New technology is sweeping across the accounting profession like never before and the question for you is whether your business is benefiting from the best and most appropriate tech available.

If so then you will have at your fingertips the financial information you need to grow your business and improve profitability and cashflow.

If not – can we help you?  Visit our dedicated cloud accounting service page to learn more about how we can get you paper free.

 

Michael

@diaryofanomb

 

PS – The most important lesson from this case-study is NOT to let your bookkeeping fall by the wayside in the first place. That’s not you, is it?

Improve profitability – in five simple steps

If your business can improve profitability the rewards include more money in the bank, a higher value for your business as well as greater peace of mind and the feeling of a job well done.

Making lower profits than you think you should leads to the opposite outcomes and a lot less fun.

So, what can you do to improve your profitability?

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